In this series, we ask respondents from all walks of life the same set of raw money questions. The answers reveal intimate details of their financial lives, and for that reason some of our respondents have chosen to remain anonymous. These interviews will vary in length and detail, depending on the answers we receive.
Talking about money is one of the longest held taboo subjects in our culture. With this weekly series, we open people’s wallets (and with them fears, hopes, and closely held beliefs). We don’t approach this with a certain outcome in mind—we just want to open doors and find out if money is taboo for good reason, or if continued quiet is keeping us all down. We hope you’ll join us in considering this question: Is it time to reimagine polite society?
To participate in this series, please email us at HLContributor@gmail.com
From Roberto, Age 28
Location: New York, NY
HipLatina: How do you make your living?
Roberto: I work in IT project management during the day. To spice things up, I do some writing, editing, and translating on the side—a little extra income always helps!
HL: How worried are you about money? How do thoughts of money affect your life?
R: Usually I’m not too worried about money. I make enough to cover the essentials and indulge a bit when I feel the urge. As a good friend of mine likes to say, as long as I can afford a night out at a no frills Thai restaurant, a lychee martini, and a massage, then I’m doing just fine!
There are two major ways money affects my life. The first is in terms of how “ready” I am for the next stages of life. I contribute a good amount to my 401k and am lucky to work for a company that is great in matching contributions—they contribute a generous 8%! I feel I’m not quite where I should be with how much I’ve saved for retirement. However, when talking with friends my age, I’m ahead of the game. My friends in their forties or fifties say it’s not about comparing myself with others, but being able to maintain the lifestyle I have now. If I’m used to spending more than my friends, I want to be able to do that in retirement.
Another way I think about money is how friends judge me for spending it. They think I could be spending more, should be able to “afford” more, or that I’m assuming they should be able to spend the same as me. Handling friendship dynamics and expectations can get tricky.
HL: How do you spend your money? How would you describe your level of debt?
R: Taking a look at my credit card is always a bit scary. One-third of my purchases were travel-related, 25% was at restaurants, and another 25% went for merchandise/entertainment. I remind myself that most of what I’m spending creates shared experiences with friends and family. It would have been closer to half of my total spending at restaurants if I went to the fanciest ones rather than the casual Mexican joint down the street. If I think about what’s behind these numbers, there’s some comfort in the fact that they’re experiences rather than material things.
Luckily, I don’t have any debt and pay my credit card in full every month. I aim to save about one-third of my take home income (apart from the contributions to my 401k). I graduated college with few loans and paid them off within a year of graduating. My first job out of college was a huge help—I traveled as a consultant. It was nice racking up hotel points, miles, and going out to free dinners most nights so I could focus on my loans and savings.
HL: How would you describe your credit score? How does your credit score affect your life (for good or for bad)?
R: My credit score is pretty high. As soon as I went to college I applied for a credit card so I have about 10 years of history. I try not to open too many lines of credit and pay on time. I put all of my purchases on one or two credit cards and pay them in full. The main reason I use credit cards exclusively for my day-to-day purchases is to rack up cash-back bonuses and miles.
I haven’t needed to rely on my credit score. I rent an apartment. Lots of apartments in New York are rented by word of mouth without any official credit check, and this was the case with my place, so it hasn’t impacted me. I don’t need a car, so haven’t needed a credit check for a car loan or lease. When I went car shopping with my brother over Thanksgiving, I was surprised to hear his credit score was in the low 600s, and he described it as “good” to the car salesman. I asked my brother why his score was so low since I know he doesn’t have any debt, and it seems it’s mostly because he doesn’t use credit cards often and hasn’t had any one card for a long time. His perception that you should only use credit cards for big purchases that you don’t have cash for (my parents think the same way) has resulted in him not having the best credit score. I don’t think a lot of people pay enough attention to their credit score or know what constitutes a good score if they haven’t had to rely on it. I’m probably one of the few people who wishes I had the opportunity to use my credit score more frequently.
HL: What regrets do you have about money–decisions you’ve made, actions you’ve taken, or not taken? Have you changed anything because of these regrets?
R: I regret some of the over-the-top spending I did right after college. It was the first time I was earning that much money and figured why not enjoy it. I saved a good amount of money but I could’ve saved more. I guess that is me talking to my younger self now that I know how expenses start to pile up. And it wasn’t major things, but I didn’t need to get six drinks at the club every Friday—it wouldn’t have killed me to drink at home and only have two while I was out. The hangovers getting progressively worse has certainly helped give me a wake-up call!
As I’ve gotten older I’ve changed this—and the definition of a night out with friends has changed, making it easier to stick to my goals. While there may be an occasional six-drink-night, I’ve learned there’s nothing wrong with inviting friends over to enjoy some wine, food, and Latin pop music videos. I’ve realized it’s okay to not travel to a new destination every weekend and instead enjoy what New York City has to offer.
HL: How do your parents talk about money–with each other, with you? How much do you know about their income, assets and savings, and economic future? Are your parents “spenders” or “savers?” How is money handled in your family? How has this changed over the years?
R: My parents are pretty good about saving, although they don’t often talk about money. They see a financial planner to prepare for retirement (which I haven’t done yet). I have no idea how much they have saved. Growing up I knew they were more conscious about reining in spending than some of my extended family. They like to splurge for a few vacations a year, but don’t often go out to dinner or make extravagant purchases.
One thing that bothers me is my dad hasn’t been working the past few years—essentially an early retirement, even though my parents hadn’t saved enough for retirement. No one likes to talk about this and things get dicey if I bring it up. My dad hated his career, but I don’t know why he didn’t try something different. He shies away from new ideas whenever family or friends bring it up or offer suggestions on other jobs. It makes me worry about how ready they are for retirement.
HL: Are you in a relationship? If so, how much money does your partner make–do they make more or less than you? How do you handle money issues? How are financial decisions made?
R: I’m not in a relationship and haven’t been in a serious one in a while. It’s always tricky when dating someone who makes more or less than you. It sets expectations of who should pay more or less. I don’t think I should be expected to pay for something because I make more money.
I’ve never had a serious enough of a relationship to say how money would be handled. It’s always been a matter of what the expectation will be when we do something together. The idea of not doing something because the other person can’t afford it doesn’t sit well with me. So, there have been times where I’ve just said, “Don’t worry about it, I don’t want to not hang out because you don’t have the money to go to dinner, so I’ll just pay.”
I see how my friends in relationships deal with money and it makes me cringe. When I was traveling in Asia with a couple (#thirdwheel) I couldn’t believe how strict they were with each other in terms of making sure they paid each other back. They would say things like, “Okay, I still owe you $6 from lunch and the entry ticket to that museum.” After the trip they sent out a spreadsheet for how much they owed each other down to the penny. I’ve done some similar accounting, but usually for bigger purchases with friends. Other couples seem to allow their partner’s issues to bring them down financially. Maybe that’s why I’m so strict about what I want in a relationship.
HL: Do you have children? How do you make decisions to spend money on your children’s interests? If you have children or plan to have them in the future, how do you plan on teaching them about money management?
R: I don’t have children, though I plan to be more upfront with them about money than my parents were with me. My parents tended to talk about money in more vague terms, so I think it would be beneficial to provide more concrete advice to my children. Many of my friends who are struggling financially say things like, “My parents have the same issues with money,” which leads them to believe their problems aren’t serious.
HL: Do you have friends in different economic situations? How do you make social decisions with friends who have different incomes, such as where to go, what to do, taking vacations, or how costs are handled?
R: I have friends in many different economic situations, which can often lead to stress when making the simplest of social plans. One of my friends never takes any responsibility for her financial crises and relies on the help of others who are better off than her financially. We all go through tough times, but it seems unfair to automatically rely on others when you’re making no effort to get a job. Many times I hesitate to ask her out for dinner, go for a drink, or even to invite her over to my apartment because she may look for leftovers in the fridge after not having eaten all day.
Some friends comment on my decisions to go out to a certain restaurant or bar, saying that I make enough to not worry about the price. They say things like, “I just want to be rich and famous.” When I say being rich won’t solve financial problems, they say I just don’t get it because, to them, I’m already rich. I explain I’m not rich, but make financially responsible decisions and save so I’m comfortable and can afford to do the things I want.
There are others who feel trapped in their financial situation and think there’s nothing they can do to get out of it. They say that’s how their parents lived so they don’t know how to live any differently. It’s okay to have $15,000 in credit card debt because their dad does. That life of saving and splurging isn’t for me. They can’t seem to cut unnecessary spending and often don’t consider it a luxury. I see having four pets as a luxury, but they think it’s a human right. I like to think that’s why I don’t end up with $1,000 a month in vet bills and can afford excursions and trips with friends instead.
I’ve seen friends get excited with a new job or large raise (one in particular doubled his salary with a new job) and start to spend like crazy. They feel they have money to burn (e.g. taking cabs everywhere, going to an expensive restaurant every day). I would rather cut down on those extraneous expenses and spend where it’s more worth it. They wonder how I have so much money to travel. I feel it’s because not buying all those steak dinners adds up.
HL: How does your financial life differ from others in your life, such as friends, family, or neighbors?
R: I’ve been lucky to be in a more stable financial situation than some of my friends after graduating college. Sometimes I feel like I’m surrounded by people who think it’s okay to not control their financial life—to feel hopeless and like there’s nothing they can do to change their situation. If I offer advice (even when they’re asking for it), they take it negatively. It’s seen as offensive rather than helpful.
Some of my friends who were sick of their jobs and didn’t like where their careers were headed went back to business school to land a job where they could earn more money. But the income from those new jobs is going toward the exorbitant debts from attending a Top-20 business school. Also, they work a lot of hours for those high salaries. If I’m working twice as many hours to make twice as much money, somehow the time:money ratio isn’t quite worth it to me.
I spoke with one acquaintance recently about how I switched from working at a consulting company to an in-house position. She offered to help me get an interview at her consulting company if I wanted to get back into the field. When I told her I didn’t want to work more than 50-60 hours a week, she said to let me know if I ever change my mind and want an interview (aka to let her know when I’m ready to sell my life away). Maybe it’s just me, but an 80 hour work week while living with her parents on the rare occasion she’s not traveling for the job doesn’t seem very glamorous.
HL: If you had more money, what would you do with it?
R: I would invest in real estate. Perhaps build up a mini-Airbnb empire. I have trouble staying in one place and am afraid to commit to buying a home in one location. But with a few homes in different places I could rent out when I’m not living in them, I would have places to stay around the world while profiting from them.